Report of Foreign Issuer (6-k)

Date : 05/16/2018 @ 3:11PM
Source : Edgar (US Regulatory)
Stock : Empresa Distribuidora Y Comercializadora Norte S.A. (Edenor) Empresa Distribuidora Y Comercializadora Norte S.A. (Edenor) (EDN)
Quote : 22.33  0.0 (0.00%) @ 7:00AM
Empresa Distribuidora Y Comercializadora Norte S.A. (Edenor) Empresa Distribuidora Y Comercializadora Norte S.A. (Edenor) share price Chart

Report of Foreign Issuer (6-k)

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 6-K
 
 
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
 
For the month of May, 2018
 
EMPRESA DISTRIBUIDORA Y COMERCIALIZADORA NORTE S.A. (EDENOR)
(DISTRIBUTION AND MARKETING COMPANY OF THE NORTH )
 
(Translation of Registrant's Name Into English)
 
Argentina
 
(Jurisdiction of incorporation or organization)
 
 
Av. del Libertador 6363,
12th Floor,
City of Buenos Aires (A1428ARG),
Tel: 54-11-4346-5000
 
(Address of principal executive offices)
 
(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)
 
Form 20-F  X      Form 40-F         

(Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)

Yes           No  X  

(If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-               .)
 
 
 

 
 

 

CONDENSED INTERIM FINANCIAL STATEMENTS

 

 

 

AS OF MARCH 31, 2018 AND FOR THE

THREE-MONTH PERIOD ENDED MARCH 31, 2018

PRESENTED IN COMPARATIVE FORM

(Stated in thousands of pesos)


 
 

CONDENSED INTERIM

FINANCIAL STATEMENTS

 

Legal Information

1

 

Condensed Interim Statement of Financial Position

2

 

Condensed Interim Statement of Comprehensive Income

4

 

Condensed Interim Statement of Changes in Equity

5

 

Condensed Interim Statement of Cash Flows

6

 

 

 

Notes to the Condensed Interim Financial Statements:

 

1 |

General information

8

 

2 |

Regulatory framework

8

 

3 |

Basis of preparation

9

 

4 |

Accounting policies

9

 

5 |

Financial risk management

11

 

6 |

Critical accounting estimates and judgments

13

 

7 |

Contingencies and lawsuits

14

 

8 |

Property, plant and equipment

15

 

9 |

Other receivables

17

 

10 |

Trade receivables

17

 

11 |

Financial assets at fair value through profit or loss

18

 

12 |

Financial assets at amortized cost

18

 

13 |

Cash and cash equivalents

18

 

14 |

Share capital and additional paid-in capital

18

 

15 |

Allocation of profits

19

 

16 |

The Company’s Share-based Compensation Plan

19

 

17 |

Trade payables

19

 

18 |

Other payables

20

 

19 |

Borrowings

20

 

20 |

Salaries and social security taxes payable

21

 

21 |

Income tax and tax on minimum presumed income / Deferred tax

21

 

22 |

Tax liabilities

22

 

23 |

Provisions

23

 

24 |

Revenue from sales

23

 

25 |

Expenses by nature

24

 

26 |

Other operating expense, net

25

 

27 |

Net financial expense

25

 

28 |

Basic and diluted earnings per share

26

 

29 |

Related-party transactions

26

 

30 |

Events after the reporting period

28

 

 

 

 

 

 

 

 

Report on review of Condensed Interim Financial Statements

 

 

Supervisory Committee’s Report

 

 

           

 

 


 
 

CONDENSED INTERIM

FINANCIAL STATEMENTS

 

Glossary of Terms

 

The following definitions, which are not technical ones, will help readers understand some of the terms used in the text of the notes to the Company’s Condensed Interim Financial Statements.

 

Terms

 

Definitions

BNA

 

Bank of the Argentine Nation

CAMMESA

 

Compañía Administradora del Mercado Mayorista Eléctrico (the company in charge of the regulation and operation of the wholesale electricity market)

IFRIC

 

International Financial Reporting Interpretations Committee

CNV

 

National Securities Commission

CPD

 

Company’s own distribution costs

CTLL

 

Central Térmica Loma de la Lata S.A.

EASA

 

Electricidad Argentina S.A.

Edenor S.A

 

Empresa Distribuidora y Comercializadora Norte S.A.

Edesur S.A

 

Empresa Distribuidora Sur S.A.

ENRE

 

National Regulatory Authority for the Distribution of Electricity

FOCEDE

 

Fund for Electric Power Distribution Expansion and Consolidation Works

ICBC

 

Industrial and Commercial Bank of China

IAS

 

International Accounting Standards

IASB

 

Accounting Standards Board

IEASA

 

IEASA S.A.

MINEM

 

Energy and Mining Ministry

OSV

 

Orígenes Seguros de Vida S.A.

PEN

 

Federal Government

PESA

 

Pampa Energía S.A.

PYSSA

 

Préstamos y Servicios S.A.

RTI

 

Tariff Structure Review

SACME

 

S.A. Centro de Movimiento de Energía

SEGBA

 

Servicios Eléctricos del Gran Buenos Aires S.A.

VAD

 

Distribution Added Value


 
 

CONDENSED INTERIM

FINANCIAL STATEMENTS

 

 

Legal Information

Corporate name: Empresa Distribuidora y Comercializadora Norte S.A.

Legal address: 6363 Del Libertador Ave., City of Buenos Aires

Main business: Distribution and sale of electricity in the area and under the terms of the Concession Agreement by which this public service is regulated.

Date of registration with the Public Registry of Commerce :

-           of the Articles of Incorporation: August 3, 1992

-           of the last amendment to the By-laws: May 28, 2007

 

Term of the Corporation : August 3, 2087

 

Registration number with the “Inspección General de Justicia” (the Argentine governmental regulatory agency of corporations) : 1,559,940

 

Parent company: EASA – See Note 43 to the Financial Statements as of December 31, 2017

 

Legal address: 1 Maipú Street, City of Buenos Aires

 

Main business of the parent company:  Investment in Edenor S.A.’s Class “A” shares and rendering of technical advisory, management, sales, technology transfer and other services related to the distribution of electricity.

 

Interest held by the parent company in capital stock and votes: 51.44%

 

CAPITAL STRUCTURE

AS OF MARCH 31, 2018

(amounts stated in pesos)

 

 

Class of shares

 

 Subscribed and paid-in
(See Note 14)

Common, book-entry shares, face value 1 and 1 vote per share

   

Class A

 

     462,292,111

Class B (1)

 

     442,210,385

Class C (2)

 

        1,952,604

   

     906,455,100

 

 

(1)      Includes 7,521,927 and 7,794,168 treasury shares as of March 31, 2018 and December 31, 2017, respectively.

(2)      Relates to the Employee Stock Ownership Program Class C shares that have not been transferred.                                                                                                                                      

                                          

1


 
 

CONDENSED INTERIM

FINANCIAL STATEMENTS

 

Edenor S.A.

Condensed Interim Statement of Financial Position

as of March 31, 2018 presented in comparative form

(Stated in thousands of pesos)

 

 

Note

 

 03.31.18

 

 12.31.17

ASSETS

 

 

   

 

Non-current assets

 

 

   

 

Property, plant and equipment

8

 

       15,611,256

 

       14,812,021

Interest in joint ventures

 

 

                 424

 

                 424

Deferred tax asset

21

 

        1,388,838

 

        1,187,021

Other receivables

9

 

             41,101

 

             42,447

Total non-current assets

 

 

       17,041,619

 

       16,041,913

 

 

 

     

Current assets

 

 

   

 

Inventories

 

 

           485,577

 

           391,904

Other receivables

9

 

             93,397

 

           200,617

Trade receivables

10

 

        8,096,647

 

        5,678,857

Financial assets at fair value through profit or loss

11

 

        4,420,114

 

        2,897,258

Financial assets at amortized cost

12

 

           405,494

 

             11,498

Cash and cash equivalents

13

 

           144,983

 

             82,860

Total current assets

 

 

       13,646,212

 

        9,262,994

TOTAL ASSETS

 

 

       30,687,831

 

       25,304,907

2


 
 

CONDENSED INTERIM

FINANCIAL STATEMENTS

 

Edenor S.A.

Condensed Interim Statement of Financial Position

as of March 31, 2018 presented in comparative form (continued)

(Stated in thousands of pesos)

 

 

Note

 

 03.31.18

 

 12.31.17

EQUITY

 

 

   

 

Share capital and reserve attributable to the owners of the Company

 

 

   

 

Share capital

14

 

           898,933

 

           898,661

Adjustment to share capital

14

 

           399,794

 

           399,495

Additional paid-in capital

14

 

             39,294

 

             31,565

Treasury stock

14

 

               7,522

 

               7,794

Adjustment to treasury stock

14

 

               8,269

 

               8,568

Legal reserve

 

 

             73,275

 

             73,275

Opcional reserve

 

 

           176,061

 

           176,061

Other comprehensive loss

 

 

           (28,097)

 

           (28,097)

Accumulated profit

 

 

           884,179

 

         (506,458)

TOTAL EQUITY

 

 

        2,459,230

 

        1,060,864

 

 

 

   

 

LIABILITIES

 

 

   

 

Non-current liabilities

 

 

   

 

Trade payables

17

 

           253,105

 

           240,900

Other payables

18

 

        6,395,980

 

        6,034,228

Borrowings

19

 

        4,526,167

 

        4,191,666

Deferred revenue

 

 

           264,801

 

           194,629

Salaries and social security payable

20

 

           126,565

 

           119,655

Benefit plans

 

 

           336,549

 

           323,564

Income tax liabilities

21

 

           791,705

 

                      -

Provisions

23

 

           701,306

 

           598,087

Total non-current liabilities

 

 

       13,396,178

 

       11,702,729

Current liabilities

 

 

   

 

Trade payables

17

 

       11,089,098

 

        9,195,303

Other payables

18

 

           519,151

 

           370,395

Borrowings

19

 

           169,716

 

             71,205

Derivative financial instruments

 

 

                      -

 

                 197

Deferred revenue

 

 

               4,468

 

               3,360

Salaries and social security payable

20

 

           931,817

 

        1,220,051

Benefit plans

 

 

             31,407

 

             31,407

Income tax payable, net

21

 

           409,123

 

           466,683

Tax liabilities

22

 

        1,531,021

 

        1,053,455

Provisions

23

 

           146,622

 

           129,258

Total current liabilities

 

 

       14,832,423

 

       12,541,314

TOTAL LIABILITIES

 

 

       28,228,601

 

       24,244,043

 

 

 

 

 

 

TOTAL LIABILITIES AND EQUITY

 

 

       30,687,831

 

       25,304,907

 

The accompanying notes are an integral part of the Condensed Interim Financial Statements.

3


 
 

CONDENSED INTERIM

FINANCIAL STATEMENTS

 

Edenor S.A.

Condensed Interim Statement of Comprehensive Income 

for the three-month period ended March 31, 2018

 presented in comparative form

(Stated in thousands of pesos)

 

 

Note

 

 03.31.18

 

 03.31.17

 

         

Revenue

24

 

       11,011,358

 

         5,366,635

Electric power purchases

   

       (5,525,295)

 

       (2,533,581)

Subtotal

   

5,486,063

 

2,833,054

Transmission and distribution expenses

25

 

       (1,559,121)

 

       (1,047,849)

Gross gain

   

3,926,942

 

1,785,205

     

 

 

 

Selling expenses

25

 

         (718,147)

 

         (498,629)

Administrative expenses

25

 

         (411,472)

 

         (329,381)

Other operating expense, net

26

 

         (207,630)

 

         (140,559)

Operating profit

   

         2,589,693

 

           816,636

           

Financial income

27

 

             91,835

 

             59,444

Financial expenses

27

 

         (485,884)

 

         (348,486)

Other financial results

27

 

         (136,390)

 

           128,898

Net financial expense

   

         (530,439)

 

         (160,144)

Profit before taxes

   

         2,059,254

 

           656,492

 

         

Income tax

21

 

         (608,436)

 

         (235,109)

Profit for the period

   

         1,450,818

 

           421,383

           

Basic and diluted earnings profit per share:

         

Basic and diluted earnings profit per share

28

 

                 1.61

 

                 0.47

 

The accompanying notes are an integral part of the Condensed Interim Financial Statements.

4


 
 

CONDENSED INTERIM

FINANCIAL STATEMENTS

 

 

Edenor S.A.

Condensed Interim Statement of Changes in Equity

for the three-month period ended March 31, 2018

presented in comparative form

(Stated in thousands of pesos)

 

 

Share capital

 

Adjustment to share capital

 

Treasury stock

 

Adjust-  ment to treasury stock

 

Additional paid-in capital

 

Legal reserve

 

Opcional reserve

 

Other reserve

 

 Other comprehesive
 loss

 

Accumulated income (deficit)

 

Total
equity

Balance at December 31, 2016

 897,043

 

397,716

 

     9,412

 

 10,347

 

3,452

 

73,275

 

176,061

 

 20,346

 

(37,172)

 

(1,188,648)

 

361,832

                                           

Ordinary and Extraordinary Shareholders’ Meeting held on 04.28.2016

-

 

-

 

-

 

-

 

-

 

-

 

-

 

21,973

 

-

 

-

 

21,973

Payment of Other reserve constitution - Share-bases compensation plan

1,618

 

1,779

 

(1,618)

 

(1,779)

 

42,319

 

-

 

-

 

(42,319)

 

-

 

-

 

-

Profit for the three-month period

                               

-

 

421,383

 

421,383

Balance at March 31, 2017

898,661

 

399,495

 

7,794

 

8,568

 

45,771

 

73,275

 

176,061

 

-

 

(37,172)

 

(767,265)

 

805,188

 

                                         

Payment of Other reserve constitution - Share-bases compensation plan

                 -

 

              -

 

               -

 

               -

 

     (14,206)

 

                -

 

               -

 

             -

 

              -

 

            -

 

(14,206)

Profit for the nine-month period

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

260,807

 

260,807

Other comprehensive results for the year

            -

 

         -

 

        -

 

      -

 

         -

 

           -

 

            -

 

       -

 

     9,075

 

       -

 

9,075

Balance at December 31, 2017

898,661

 

399,495

 

7,794

 

8,568

 

31,565

 

73,275

 

176,061

 

-

 

(28,097)

 

(506,458)

 

1,060,864

Increase of Other reserve constitution - Share-bases compensation plan (Note 16)

-

 

-

 

-

 

-

 

-

 

-

 

-

 

7,729

 

-

 

-

 

7,729

Payment of Other reserve constitution - Share-bases compensation plan (Note 16)

272

 

299

 

(272)

 

(299)

 

7,729

 

-

 

-

 

(7,729)

 

-

 

-

 

-

Adjustment model of expected losses  NIIF 9 - Change of accounting standard  (Note 6)

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(60,181)

 

(60,181)

Profit for the three-month period

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

1,450,818

 

1,450,818

Balance at March 31, 2018

898,933

 

399,794

 

7,522

 

8,269

 

39,294

 

73,275

 

176,061

 

-

 

(28,097)

 

884,179

 

2,459,230

 

 

The accompanying notes are an integral part of the Condensed Interim Financial Statements.

5


 
 

CONDENSED INTERIM

FINANCIAL STATEMENTS

Edenor S.A.

Condensed Interim Statement of Cash Flows

for the three-month period ended March 31, 2018

presented in comparative form

(Stated in thousands of pesos)  

 

 

Note

 

 03.31.18

 

 03.31.17

Cash flows from operating activities

         

Profit for the period

   

         1,450,818

 

           421,383

           

Adjustments to reconcile net (loss) profit to net cash flows from operating activities:

         

Depreciation of property, plants and equipments

8 & 25

 

           128,319

 

             97,474

Loss on disposals of property, plants and equipments

26

 

                  832

 

               2,693

Net accrued interest

27

 

           394,043

 

           288,281

Exchange difference

27

 

           262,427

 

           (73,945)

Income tax

21

 

           608,436

 

           235,109

Allowance for the impairment of trade and other receivables, net of recovery

25

 

           179,451

 

             50,373

Adjustment to present value of receivables

27

 

                   70

 

                   74

Provision for contingencies

26

 

           131,306

 

             66,270

Changes in fair value of financial assets

27

 

         (138,496)

 

           (58,250)

Accrual of benefit plans

   

             37,571

 

             25,170

Income from non-reimbursable customer contributions

26

 

                (932)

 

                (191)

Other reserve constitution - Share bases compensation plan

16

 

               7,729

 

             21,973

Changes in operating assets and liabilities:

         

Increase in trade receivables

   

       (2,532,862)

 

         (699,073)

Increase (Decrease) in other receivables

   

             (7,224)

 

             10,029

Increase (Decrease) in inventories

   

           (93,673)

 

             23,816

Increase in deferred revenue

   

             72,212

 

                      -

Increase in trade payables

   

         1,751,728

 

           143,519

Decrease in salaries and social security payable

   

         (281,324)

 

         (179,333)

Decrease in benefit plans

   

           (24,585)

 

             (7,682)

Increase (Decrease) in tax liabilities

   

           451,183

 

         (246,316)

Increase in other payables

   

           331,663

 

             31,504

Decrease in provisions

25

 

           (10,723)

 

           (12,947)

Payment of Tax payable

   

           (28,992)

 

                      -

Net cash flows generated by operating activities

   

         2,688,977

 

           139,931

 

6


 
 

CONDENSED INTERIM

FINANCIAL STATEMENTS

Edenor S.A.

Condensed Interim Statement of Cash Flows

for the three-month period ended March 31, 2018

presented in comparative form (continued)

(Stated in thousands of pesos)

 

 

Note

 

 03.31.18

 

 03.31.17

Cash flows from investing activities

         

Payment of property, plants and equipments

   

         (999,196)

 

         (742,941)

Collection of Financial assets

   

           531,260

 

           390,322

Payments of Financial assets

   

       (1,393,406)

 

         (546,518)

(Subscription) Redemtion net of money market funds

 

         (771,015)

 

           570,845

Collection of receivables from sale of subsidiaries

   

               2,578

 

               1,606

Net cash flows used in investing activities

   

       (2,629,779)

 

         (326,686)

 

         

 Increase (Decrease) in cash and cash equivalents

   

59,198

 

(186,755)

 

         
           

Cash and cash equivalents at the beginning of year

13

 

             82,860

 

           258,562

Exchange differences in cash and cash equivalents

   

               2,925

 

             (3,147)

Increase (Decrease) in cash and cash equivalents

   

             59,198

 

         (186,755)

Cash and cash equivalents at the end of the period

13

 

144,983

 

68,660

           
           

Supplemental cash flows information

         

Non-cash activities

         
           
           

Financial costs capitalized in property, plants and equipments

8 & 25

 

         (101,443)

 

           (65,077)

         

 .

Acquisitions of property, plant and equipment through increased trade payables

   

         (224,404)

 

         (158,112)

 

 

The accompanying notes are an integral part of the Condensed Interim Financial Statements.

 

7


 
 

CONDENSED INTERIM

FINANCIAL STATEMENTS

NOTES

Note 1 |        General information

 

History and development of the Company

 

Edenor S.A. was organized on July 21, 1992 by Executive Order No. 714/92 in connection with the privatization and concession process of the distribution and sale of electric power carried out by SEGBA.

 

By means of an International Public Bidding, the PEN awarded 51% of the Company’s capital stock, represented by the Class "A" shares, to the bid made by EASA, the parent company of Edenor S.A. The award as well as the transfer contract were approved on August 24, 1992 by Executive Order No. 1,507/92 of the PEN.

 

On September 1, 1992, EASA took over the operations of Edenor S.A.

 

The corporate purpose of Edenor S.A. is to engage in the distribution and sale of electricity within the concession area. Furthermore, among other activities, the Company may subscribe or acquire shares of other electricity distribution companies, subject to the approval of the regulatory agency, assign the use of the network to provide electricity transmission or other voice, data and image transmission services, and render advisory, training, maintenance, consulting, and management services and know-how related to the distribution of electricity both in Argentina and abroad. These activities may be conducted directly by Edenor S.A. or through subsidiaries or related companies. In addition, the Company may act as trustee of trusts created under Argentine laws.

 

 

 

Note 2 |        Regulatory framework

 

At the date of issuance of these condensed interim financial statements, the changes with respect to the situation reported by the Company as of December 31, 2017 are the following:

 

a)    Electricity rate situation

 

On January 31, 2018, the ENRE issued Resolution No. 33/18, whereby it approves the CPD values, the values of the monthly installment to be applied in accordance with the provisions of ENRE Resolution No. 329/17, and the values of the Company’s electricity rate schedule applicable to consumption recorded as from February 1, 2018. Additionally, it is informed that the average electricity rate value amounts to $2.4627/kwh.

 

At the date of issuance of these condensed interim financial statements, the amount accrued for the monthly installment to be applied in accordance with the provisions of ENRE Resolution No. 33/18, amounts to $ 302.3 million, which is included in the “Revenue from sales – Sales of electricity” line item.

 

b)    Framework Agreement

 

Due to the fact that at the date of these condensed interim financial statements the approvals by the Federal Government and the Government of the Province of Buenos Aires of a new Addendum to the Framework Agreement, which should have gone into effect on October 1, 2017, are still in process, no revenue for this concept which as of March 31, 2018, accumulates a total of $ 93.5 million, has been recognized.

 

 

8


 
 

CONDENSED INTERIM

FINANCIAL STATEMENTS

NOTES

 

c)    Penalties

 

Due to the occurrence of an extraordinary situation that affected the provision of the service, covered by item 3.3 of Sub-appendix 4 to the Concession Agreement (more than 70,000 daily consumers affected for given periods of time), on April 23, 2018, the ENRE issued Resolution No. 118 pursuant to which the Company is instructed to calculate and pay a compensation to small-demand residential customers (residential Tariff 1 Consumers) for each interruption higher than or equal to 20 hours suffered during said periods. The impacts of these compensation amounts were quantified by the Company in $ 87 millions and recognized as of March 31, 2018.

 

At the date of issuance of these condensed interim financial statements, the Company is analyzing the possibility of challenging the aforementioned resolution to consider that the resolution in it does not conform for the applicable regulations.

 

 

Note 3 |        Basis of preparation

 

These condensed interim financial statements for the three-month period ended March 31, 2018 have been prepared in accordance with IFRS issued by the IASB and IFRIC interpretations, incorporated by the CNV.

 

This condensed interim financial information must be read together with the Company’s Financial Statements as of December 31, 2017, which have been prepared in accordance with IFRS. These condensed interim financial statements are stated in thousands of Argentine pesos, unless specifically indicated otherwise. They have been prepared under the historical cost convention, as modified by the measurement of financial assets at fair value through profit or loss.

 

The condensed interim financial statements for the three-month period ended March 31, 2018 have not been audited; they have been reviewed by the Independent Accountant in accordance with ISRE 2,410, whose scope is substantially less than that of an audit performed in accordance with IFRS . The Company’s Management estimates that they include all the necessary adjustments to fairly present the results of operations for each period. The result of operations for the three-month period ended March 31, 2018 does not necessarily reflect the Company’s results in proportion to the full fiscal year.

 

These condensed interim financial statements were approved for issue by the Company’s Board of Directors on May 10, 2018.

 

Comparative information

 

The balances as of December 31, 2017 and for the three-month period ended March 31, 2017, disclosed in these condensed interim financial statements for comparative purposes, arise from the financial statements as of those dates.

 

Note 4 |        Accounting policies

 

The accounting policies adopted for these condensed interim financial statements are consistent with those used in the preparation of the financial statements for the last financial year, which ended on December 31, 2017, except for those mentioned below.

 

There are no new IFRS or IFRIC applicable as from this period that have a material impact on the Company’s condensed interim financial statements.

 

These condensed interim financial statements must be read together with the audited Financial Statements as of December 31, 2017 prepared under IFRS.

 

9


 
 

CONDENSED INTERIM

FINANCIAL STATEMENTS

NOTES

Note 4.1 |       New accounting standards, amendments and interpretations issued by the IASB

 

IAS 19 “Employee benefits”: It introduces amendments to post-employment defined benefit plans in the case of a plan amendment, curtailment or settlement. The net defined benefit liability (asset) is remeasured using the current fair value of plan assets and current actuarial assumptions (including current market interest rates and other current market prices), that reflect: a) the benefits offered under the plan and the plan assets before the plan amendment, curtailment or settlement; and b) the benefits offered under the plan and the plan assets after the plan amendment, curtailment or settlement. The current period service cost for the period subsequent to the plan amendment, curtailment or settlement is calculated using the actuarial assumptions used to remeasure the defined benefit liability (asset) (rather than the actuarial assumptions determined at the beginning). The net interest after the plan amendment, curtailment or settlement is determined using the net defined benefit liability (asset) and the discount rate used to remeasure the liability (asset). The standard applies to plan amendments, curtailments or settlements that occur as from January 1, 2019, with earlier adoption permitted. The Company is currently analyzing the impact of the adoption of IAS 19; nevertheless, it is estimated that the application thereof will have no significant impact on the Company’s results of operations or its financial position.

 

Note 4.2 |       Trade receivables

 

The receivables arising from services billed to customers but not collected as well as those arising from services rendered but unbilled at the closing date of the period/year are recognized at fair value and subsequently measured at amortized cost using the effective interest rate method. 

 

The receivables from electricity supplied to low-income areas and shantytowns are recognized, along with revenue, when the Framework Agreement has been renewed for the period in which the service was provided.

 

The amounts thus determined are net of an allowance for the impairment of receivables. The future expected loss impairment rate is determined per customer category, based on the historical comparison of collections made and delinquent balances of each customer group, and applied to the total of the Company’s receivables. This change from the criterion used in the Financial Statements as of December 31, 2017, relates to the implementation of IFRS 9 as from January 1, 2018; see impact in Note 6.

 

 Any debt arising from the bills for electricity consumption that remain unpaid 7 working days after their first due dates for small-demand (T1), medium-demand (T2) and large-demand (T3) customers is considered a delinquent balance.

 

 Additionally, and faced with temporary and/or exceptional situations, the Company’s Management may redefine the amount of the allowance, specifying and supporting the criteria used in all the cases.

 

10


 
 

CONDENSED INTERIM

FINANCIAL STATEMENTS

NOTES

Note 5 |        Financial risk management

Note 5.1 |       Financial risk factors

        

The Company’s activities and the market in which it operates expose the Company to a series of financial risks: market risk (including currency risk, cash flows interest rate risk, fair value interest rate risk and price risk), credit risk and liquidity risk.

 

            There have been no significant changes in risk management policies since the last fiscal year end. 

 

a.          Market risks

 

i.           Currency risk

 

 

As of March 31, 2018 and December 31, 2017, the Company’s balances in foreign currency are as follow:

   

Currency

 

Amount in foreign currency

 

Exchange rate (1)

 

Total
03.31.18

 

Total
12.31.17

           

ASSETS

         

 

       

CURRENT ASSETS

         

 

       

Other receivables

 

USD

 

1,406

 

20.049

 

28,189

 

  -

Financial assets at fair value through profit or loss

 

USD

 

  93,062

 

20.049

 

1,865,800

 

1,239,277

Cash and cash equivalents

 

USD

 

  89

 

20.049

 

1,784

 

4,415

   

EUR

 

  12

 

24.666

 

  296

 

  267

TOTAL CURRENT ASSETS

     

  94,569

     

1,896,069

 

1,243,959

TOTAL ASSETS

     

  94,569

 

 

 

1,896,069

 

1,243,959

           

 

       

LIABILITIES

         

 

       

NON-CURRENT LIABILITIES

         

 

       

Borrowings

 

USD

 

  224,635

 

20.149

 

4,526,167

 

4,191,666

TOTAL NON-CURRENT LIABILITIES

     

  224,635

 

 

 

4,526,167

 

4,191,666

CURRENT LIABILITIES

         

 

       

Trade payables

 

USD

 

  10,241

 

18.649

 

206,351

 

  261,758

   

EUR

 

  83

 

22.450

 

2,063

 

6,263

   

CHF

 

  25

 

19.168

 

  527

 

  10,466

   

NOK

 

  68

 

2.290

 

  176

 

  156

Borrowings

 

USD

 

8,423

 

18.649

 

169,716

 

  71,205

TOTAL CURRENT LIABILITIES

     

  18,840

     

378,833

 

  349,848

TOTAL LIABILITIES

     

  243,475

 

 

 

4,905,000

 

4,541,514

 

(1)      The exchange rates used are the BNA exchange rates in effect as of March 31, 2018 for US Dollars (USD), Euros (EUR), Swiss Francs (CHF) and Norwegian Krones (NOK).

 

11


 
 

CONDENSED INTERIM

FINANCIAL STATEMENTS

NOTES

                   ii.           Fair value estimate

 

 

The Company classifies the measurements of financial instruments at fair value using a fair value hierarchy that reflects the relevance of the variables used to carry out such measurements. The fair value hierarchy has the following levels:


·
Level 1 : quoted prices (unadjusted) in active markets for identical assets or liabilities.


·
Level 2 : inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly (i.e. prices) or indirectly (i.e. derived from the prices).


·
Level 3 : inputs for the asset or liability that are not based on observable market data (i.e. unobservable inputs).

 

The table below shows the Company’s financial assets measured at fair value as of March 31, 2018 and December 31, 2017:

 

   

 LEVEL 1

 

 LEVEL 2

 

 LEVEL 3

 

 TOTAL

                 

At Marzo 31, 2018

               

Assets

               

Financial assets at fair value through profit or loss:

               

Government bonds

 

  1,866,218

 

-

 

  -

 

  1,866,218

Money market funds

 

  2,553,896

 

-

 

  -

 

  2,553,896

Total assets

 

  4,420,114

 

-

 

  -

 

  4,420,114

Derivative financial instruments

 

-

 

-

 

  -

 

  -

                 

At December 31, 2017

               

Assets

               

Government bonds

 

  1,239,282

 

-

 

  -

 

  1,239,282

Money market funds

 

  1,657,976

 

-

 

  -

 

  1,657,976

Total assets

 

  2,897,258

 

-

 

  -

 

  2,897,258

                 

Liabilities

               

Derivative financial instruments

 

-

 

197

 

  -

 

197

Total liabilities

 

-

 

197

 

  -

 

197

 

iii.         Interest rate risk

 

Interest rate risk is the risk of fluctuation in the fair value or cash flows of an instrument due to changes in market interest rates. The Company’s exposure to interest rate risk arises mainly from its long-term debt obligations.

 

Indebtedness at floating rates exposes the Company to interest rate risk on its cash flows. Indebtedness at fixed rates exposes the Company to interest rate risk on the fair value of its liabilities. As of March 31, 2018 and December 31, 2017 -except for a loan applied for by the Company and granted by ICBC Bank as from October 2017 for a three-year term at a six-month Libor rate plus an initial 2.75% spread, which will be adjusted semi-annually by a quarter-point-, 100% of the loans were obtained at fixed interest rates. The Company’s policy is to keep the largest percentage of its indebtedness in instruments that accrue interest at fixed rates.

12


 
 

CONDENSED INTERIM

FINANCIAL STATEMENTS

NOTES

In this regard, on April 12, 2018, the Company entered into a coverage operation with Citibank London, with the aim of fix the financial cost subject to variable rate of interest amounts that the Company must pay during the period October 2018 to October 2020, corresponding to the loan taken from the ICBC Bank (Note 22 to the Financial Statements as of December 31, 2017).

 

 

Note 6 |        Critical accounting estimates and judgments

 

The preparation of the condensed interim financial statements requires the Company’s Management to make estimates and assessments concerning the future, exercise critical judgments and make assumptions that affect the application of the accounting policies and the reported amounts of assets and liabilities and revenues and expenses. 

 

These estimates and judgments are permanently evaluated and are based upon past experience and other factors that are reasonable under the existing circumstances. Future actual results may differ from the estimates and assessments made at the date of preparation of these condensed interim financial statements.

 

In the preparation of these condensed interim financial statements, there were no changes in either the critical judgments made by the Company when applying its accounting policies or the information sources of estimation uncertainty with respect to those applied in the Financial Statements for the year ended December 31, 2017, except for the following:

 

Allowances for the impairment of receivables :

 

As from January 1, 2018, the Company has applied the amended IFRS 9 retrospectively with the allowed practical resources, without restating the comparative periods.

 

The Company has performed a review of the financial assets it currently measures and classifies at fair value through profit or loss or at amortized cost and has concluded that they meet the conditions to maintain their classification; consequently, the initial adoption has not affected the classification and measurement of the Company’s financial assets.

 

Furthermore, with regard to the new hedge accounting model, the Company has not elected to designate any hedge relationship at the date of the initial adoption of the amended IFRS 9 and, consequently, has generated no impact on the Company’s results of operations or its financial position.

Finally, with regard to the change in the methodology for calculating the impairment of financial assets based on expected credit losses, the Company has applied the simplified approach of IFRS 9 for trade receivables and other receivables with similar risk characteristics. In order to measure the expected credit losses, receivables are grouped by segment, and on the basis of the shared credit risk characteristics and the number of days past the payment due date. The expected loss as of January 1, 2018 was determined based on the following coefficients calculated for the number of days past the payment due date:

 

 

13


 
 

CONDENSED INTERIM

FINANCIAL STATEMENTS

NOTES

 

For such purpose, the adjustments determined as of December 31, 2017 are as follow:

 

 

 

Number of days

 

 

0 -30

 

30-60

 

60-90

 

90-120

 

120-150

Loss expected porcentage

 

8%

 

12%

 

19%

 

26%

 

59%

 

Amount of the provisions for impairment of the trade receivables at 12.31.2017 by IAS 39

    (458,853)

 

 

Adjustment of expected losses  NIIF 9

      (82,041)

Amount of the provisions for impairment of the trade receivables at 12.31.2017 by NIIF 9

    (540,894)

 

The adjustment determined as a result of the application of this new standard, net of its tax effect, amounts to $ 60.2 million, which is disclosed within the “Unappropriated Retained Earnings” line item.

 

Trade receivables are derecognized when there is no reasonable expectation of their recovery. Any debt arising from the bills for electricity consumption that remain unpaid 7 working days after their first due dates for small-demand (T1), medium-demand (T2) and large-demand (T3) customers is regarded by the Company as a delinquent balance.

 

 Additionally, and faced with temporary and/or exceptional situations, the Company’s Management may redefine the amount of the allowance, specifying and supporting the criteria used in all the cases.

 

Note 7 |        Contingencies and lawsuits

 

At the date of issuance of these condensed interim financial statements, there are no significant changes with respect to the situation reported by the Company in the Financial Statements as of December 31, 2017.

 

14


 
 

CONDENSED INTERIM

FINANCIAL STATEMENTS

NOTES

Note 8 |        Property, plant and equipment   

 

 

 

 Lands and buildings

 

 Substations

 

 High, medium and low voltage lines

 

 Meters and Transformer chambers and platforms

 

 Tools, Furniture, vehicles, equipment, communications and advances to suppliers

 

  Construction in process

 

  Supplies and spare parts

 

 Total

Cost

 

300,914

 

  2,512,243

 

  7,080,373

 

  2,866,259

 

1,447,112

 

5,008,770

 

  55,448

 

19,271,119

Accumulated depreciation

 

(72,168)

 

  (674,135)

 

  (2,266,848)

 

(991,967)

 

  (453,980)

 

  -

 

  -

 

(4,459,098)

 Net amount 12.31.17

 

228,746

 

  1,838,108

 

  4,813,525

 

  1,874,292

 

  993,132

 

5,008,770

 

  55,448

 

14,812,021

                                 

Additions

 

  -

 

-

 

  -

 

-

 

54,917

 

  861,444

 

  12,025

 

  928,386

Disposals

 

  -

 

-

 

  -

 

  (1,051)

 

  219

 

  -

 

  -

 

  (832)

Transfers

 

88,300

 

  26,659

 

389,940

 

51,281

 

(32,189)

 

  (520,298)

 

(3,693)

 

  -

Depreciation for the period

 

(6,489)

 

  (16,841)

 

(44,256)

 

(23,126)

 

(37,607)

 

  -

 

  -

 

  (128,319)

 Net amount 03.31.18

 

310,557

 

  1,847,926

 

  5,159,209

 

  1,901,396

 

  978,472

 

5,349,916

 

  63,780

 

15,611,256

                                 

Cost

 

389,214

 

  2,538,902

 

  7,470,313

 

  2,916,315

 

1,468,453

 

5,349,916

 

  63,780

 

20,196,893

Accumulated depreciation

 

(78,657)

 

  (690,976)

 

  (2,311,104)

 

  (1,014,919)

 

  (489,981)

 

  -

 

  -

 

(4,585,637)

 Net amount 03.31.18

 

310,557

 

  1,847,926

 

  5,159,209

 

  1,901,396

 

  978,472

 

5,349,916

 

  63,780

 

15,611,256

 

·        During the period ended March 31, 2018, direct costs capitalized amounted to $ 171.1 million.

 

·        Financial costs capitalized for the period ended March 31, 2018 amounted to $ 101.4 million.

15


 
 

CONDENSED INTERIM

FINANCIAL STATEMENTS

NOTES

 

 

 

 Lands and buildings

 

 Substations

 

 High, medium and low voltage lines

 

 Meters and Transformer chambers and platforms

 

 Tools, Furniture, vehicles, equipment, communications and advances to suppliers

 

  Construction in process

 

  Supplies and spare parts

 

 Total

Cost

 

235,709

 

  2,048,014

 

  6,024,954

 

  2,523,084

 

1,265,502

 

3,040,451

 

  162,088

 

15,299,802

Accumulated depreciation

 

(69,097)

 

  (617,062)

 

  (2,119,167)

 

(907,145)

 

  (390,341)

 

  -

 

  -

 

(4,102,812)

 Net amount 12.31.16

 

166,612

 

  1,430,952

 

  3,905,787

 

  1,615,939

 

  875,161

 

3,040,451

 

  162,088

 

11,196,990

                                 

Additions

 

  -

 

-

 

  -

 

-

 

33,795

 

  726,366

 

  213

 

  760,374

Disposals

 

  (145)

 

-

 

(1,878)

 

(670)

 

  -

 

  -

 

  -

 

(2,693)

Transfers

 

12,714

 

  49,485

 

250,995

 

56,145

 

(22,191)

 

  (347,148)

 

  -

 

  -

Depreciation for the period

 

(3,956)

 

  (13,518)

 

(37,890)

 

(20,172)

 

(21,938)

 

  -

 

  -

 

  (97,474)

 Net amount 03.31.17

 

175,225

 

  1,466,919

 

  4,117,014

 

  1,651,242

 

  864,827

 

3,419,669

 

  162,301

 

11,857,197

                                 

Cost

 

248,141

 

  2,097,499

 

  6,265,111

 

  2,578,435

 

1,276,490

 

3,419,669

 

  162,301

 

16,047,646

Accumulated depreciation

 

(72,916)

 

  (630,580)

 

  (2,148,097)

 

(927,193)

 

  (411,663)

 

  -

 

  -

 

(4,190,449)

 Net amount 03.31.17

 

175,225

 

  1,466,919

 

  4,117,014

 

  1,651,242

 

  864,827

 

3,419,669

 

  162,301

 

11,857,197

 

·        During the period ended March 31, 2017, direct costs capitalized amounted to $ 74.3 million.

 

·        Financial costs capitalized for the period ended March 31, 2017 amounted to $ 65.1 million.

                                                                                                                                                                                          

16


 
 

CONDENSED INTERIM

FINANCIAL STATEMENTS

NOTES

Note 9 |        Other receivables  

 

 

Note

 

 03.31.18

 

 12.31.17

Non-current:

         
     

  -

 

  -

Financial credit

   

35,865

 

37,019

Related parties

 29.d

 

5,236

 

5,428

Total Non-current

   

41,101

 

42,447

           

Current:

         

Prepaid expenses

   

16,089

 

4,986

Advances to suppliers

   

9,512

 

6,631

Advances to personnel

   

1,492

 

2,230

Security deposits

   

10,824

 

10,327

Financial credit

   

11,621

 

11,621

Receivables from electric activities

   

103,686

 

114,561

Related parties

 29.d

 

1,652

 

1,093

Guarantee deposits on derivative financial instruments

  -

 

60,049

Judicial deposits

   

20,074

 

16,115

Other

   

35

 

6

Allowance for the impairment of other receivables

   

(81,588)

 

(27,002)

Total Current

   

93,397

 

200,617

 

The carrying amount of the Company’s other financial receivables approximates their fair value.

 

The other non-current receivables are measured at amortized cost, which does not differ significantly from their fair value.

 

The roll forward of the allowance for the impairment of other receivables is as follows:

 

     

 03.31.18

 

 03.31.17

Balance at beginning of the period

   

27,002

 

34,699

Increase

   

54,586

 

  -

Recovery

   

  -

 

(12,980)

Balance at end of the period

   

81,588

 

21,719

 

 

Note 10 |     Trade receivables

 

     

 03.31.18

 

 12.31.17

Current:

         

Sales of electricity - Billed

   

  4,692,401

 

  2,931,339

Sales of electricity – Unbilled

   

  3,806,537

 

  2,982,677

Framework Agreement

   

156,412

 

156,412

Fee payable for the expansion of the transportation and others

   

22,966

 

22,994

Receivables in litigation

   

52,306

 

44,288

Allowance for the impairment of trade receivables

   

(633,975)

 

(458,853)

Total Current

   

  8,096,647

 

  5,678,857

 

The carrying amount of the Company’s trade receivables approximates their fair value.

 

17


 
 

CONDENSED INTERIM

FINANCIAL STATEMENTS

NOTES

The roll forward for the impairment of financial asset is as follows:

 

     

 03.31.18

 

 03.31.17

Balance at beginning of the period

   

458,853

 

259,682

Increase

   

206,907

 

63,353

Decrease

   

(31,785)

 

(6,918)

Balance at end of the period

   

633,975

 

316,117

 

(1)    As of March 31, 2018, includes the impairment of financial assets for $ 82 million due to the application, of IFRS 9 as from January 1, 2018 (Note 6).

 

Note 11 |     Financial assets at fair value through profit or loss

 

     

 03.31.18

 

 12.31.17

           

Current

         

Government bonds

   

  1,866,218

 

  1,239,282

Money market funds

   

  2,553,896

 

  1,657,976

Total current

   

  4,420,114

 

  2,897,258

 

Note 12 |     Financial assets at amortized cost

 

     

 03.31.18

 

 12.31.17

Current

         

Government bonds

   

                      -

 

             11,498

Time deposits

   

           405,494

 

                      -

Total Current

   

           405,494

 

             11,498

 

Note 13 |     Cash and cash equivalents

 

   

 03.31.18

 

 12.31.17

 

 03.31.17

Cash and banks

 

144,983

 

82,860

 

43,032

Money market funds

 

  -

 

  -

 

25,628

Total cash and cash equivalents

 

144,983

 

82,860

 

68,660

 

 

Note 14 |     Share capital and additional paid-in capital

 

   

 Share capital

 

 Additional paid-in capital

 

 Total

             

Balance at December 31, 2016

 

1,314,518

 

3,452

 

1,317,970

             

Balance at December 31, 2017

 

1,314,518

 

31,565

 

1,346,083

             

Payment of Other reserve constitution - Share-bases compensation plan (Note 16)

 

  -

 

7,729

 

7,729

Balance at March 31, 2018

 

1,314,518

 

39,294

 

1,353,812

18


 
 

CONDENSED INTERIM

FINANCIAL STATEMENTS

NOTES

 

As of March 31, 2018, the Company’s share capital amounts to 906,455,100 shares, divided into 462,292,111 common, book-entry Class A shares with a par value of one peso each and the right to one vote per share; 442,210,385 common, book-entry Class B shares with a par value of one peso each and the right to one vote per share; and 1,952,604 common, book-entry Class C shares with a par value of one peso each and the right to one vote per share.

 

Note 15 |     Distribution of profits

 

The restrictions on the distribution of dividends by the Company are those provided for by the Business Organizations Law and the negative covenants established by the Corporate Notes program. As of March 31, 2018, the Company complies with the indebtedness ratio established in such program.

 

Note 16 |      The Company’s Share-based Compensation Plan

 

As indicated in the Financial Statements as of December 31, 2017, the Company has decided to use the available treasury shares for the implementation of share-based compensation plans for its senior management against the achievement of the strategic objectives set annually.

 

At the date of issuance of these condensed interim financial statements, the Company awarded a total of 272,241 shares to executive directors and managers as additional remuneration for their performance in special processes developed during the 2018 period.

 

The fair value of the previously referred to shares at the award date, amounted to $ 11.1 million and has been recorded in the Salaries and social security taxes line item, with a contra account in Equity. The amount recorded in Equity is net of the tax effect.

 

Note 17 |     Trade payables

 

 

Note

 

 03.31.18

 

 12.31.17

Non-current

         

Customer guarantees

   

107,479

 

100,469

Customer contributions

   

85,174

 

79,979

Funding contributions - substations

   

60,452

 

60,452

Total Non-current

   

253,105

 

240,900

           

Current

         

Payables for purchase of electricity - CAMMESA

   

  4,599,481

 

  3,047,128

Provision for unbilled electricity purchases - CAMMESA

   

  5,001,881

 

  4,547,990

Suppliers

   

  1,306,417

 

  1,351,575

Advance to customer

   

119,040

 

149,069

Customer contributions

   

15,808

 

18,764

Discounts to customers

   

4,871

 

8,384

Funding contributions - substations

   

37,372

 

37,372

Related parties

 29.d

 

4,228

 

35,021

Total Current

   

11,089,098

 

  9,195,303

 

The fair values of non-current customer contributions as of March 31, 2018 and December 31, 2017 amount to $ 92.6 million and $ 89.6 million, respectively. The fair values are determined based on estimated cash flows discounted at a representative market rate for this type of transactions. The applicable fair value category is Level 3 category.

 

The carrying amount of the rest of the financial liabilities included in the Company’s trade payables approximates their fair value.

 

19


 
 

CONDENSED INTERIM

FINANCIAL STATEMENTS

NOTES

Note 18 |     Other payables

 

 

Note

 

 03.31.18

 

 12.31.17

Non-current

         

Loans (mutuum) with CAMMESA

   

  1,956,236

 

  1,885,093

ENRE penalties and discounts

   

  4,180,334

 

  3,885,767

Liability with FOTAE

   

194,419

 

190,179

Payment agreements with ENRE

   

64,991

 

73,189

Total Non-current

   

  6,395,980

 

  6,034,228

           

Current

         

ENRE penalties and discounts

   

438,530

 

288,210

Related parties

 29.d

 

1,956

 

5,253

Advances for works to be performed

   

13,576

 

13,576

Payment agreements with ENRE

   

65,089

 

63,356

Total Current

   

519,151

 

370,395

 

The carrying amount of the Company’s other financial payables approximates their fair value.

 

Note 19 |     Borrowings

 

   

 03.31.18

 

 12.31.17

Non-current

       

Corporate notes (1)

 

  3,528,407

 

  3,259,216

Borrowing

 

997,760

 

932,450

Total non-current

 

  4,526,167

 

  4,191,666

         

Current

       

Interest from corporate notes

 

149,259

 

62,236

Interest from borrowing

 

20,457

 

8,969

Total current

 

169,716

 

71,205

 

(1)    Net of debt repurchase/redemption and issuance expenses.

 

 

The fair values of the Company’s non-current borrowings as of March 31, 2018 and December 31, 2017 amount approximately to $ 4,528.2 million and $ 4,122.9 million, respectively. Such values were calculated on the basis of the estimated market price of the Company’s Corporate Notes at the end of the each period . The applicable fair value category is Level 1 category.

 

The carrying amount of the rest of the financial liabilities included in the Company’s trade payables approximates their fair value.

 

 

20


 
 

CONDENSED INTERIM

FINANCIAL STATEMENTS

NOTES

 

Note 20 |     Salaries and social security taxes payable

 

   

 03.31.18

 

 12.31.17

Non-current

       

Early retirements payable

 

2,436

 

3,359

Seniority-based bonus

 

124,129

 

116,296

Total non-current

 

126,565

 

119,655

         

Current

       

Salaries payable and provisions

 

687,066

 

  1,064,106

Social security payable

 

240,236

 

151,137

Early retirements payable

 

4,515

 

4,808

Total current

 

931,817

 

  1,220,051

 

The carrying amount of the Company’s salaries and social security taxes payable approximates their fair value.

 

Note 21 |     Income tax and tax on minimum presumed income / Deferred tax

 

At the date of issuance of these condensed interim financial statements, there are no significant changes with respect to the situation reported by the Company as of December 31, 2017, except for the following:

 

   

 03.31.18

 

 12.31.17

Non-Current

       

Income tax payable 2018 (1)

 

791,705

 

  -

Total non-current

 

791,705

 

  -

         

Current

       

Income tax payable 2017

618,293

 

618,293

Income tax payable

 

618,293

 

618,293

Tax withholdings

 

(209,170)

 

(151,610)

Total current

 

409,123

 

466,683

 

(1)   As of March 31, 2018, includes $ 3.3 million related to income tax on the transfer of shares (Note 16).

 

 

21


 
 

CONDENSED INTERIM

FINANCIAL STATEMENTS

NOTES

The detail of deferred tax assets and liabilities is as follows:

 

 

03.31.18

 

12.31.17

Deferred tax assets

     

Inventories

4,462

 

4,390

Trade receivables and other receivables

181,489

 

110,041

Trade payables and other payables

1,291,546

 

1,182,315

Salaries and social security payable

37,757

 

34,615

Benefit plans

93,560

 

90,313

Tax liabilities

12,048

 

12,357

Provisions

243,445

 

208,804

Deferred tax asset

1,864,307

 

1,642,835

       

Deferred tax liabilities

     

Property, plants and equipments

(442,116)

 

(439,068)

Financial assets at fair value through profit or loss

(28,140)

 

(11,278)

Borrowings

(5,213)

 

(5,468)

Deferred tax liability

(475,469)

 

(455,814)

       

Net deferred tax assets

1,388,838

 

1,187,021

 

The detail of the income tax expense is as follows:

 

 

 

03.31.18

 

03.31.17

Deferred tax

 

             201,817

 

70,413

Current tax

 

(810,253)

 

(305,522)

Income tax expense

 

(608,436)

 

(235,109)

 

 

 

 

 

 

 

 

 

 

   

03.31.18

 

03.31.17

Profit for the period before taxes

 

2,059,254

 

656,492

Applicable tax rate

 

30%

 

35%

Loss for the year at the tax rate

(617,776)

 

(229,772)

     

 

 

Non-taxable income

 

-

 

(5,337)

Change in the income tax rate (1)

 

9,340

 

-

Income tax expense

 

(608,436)

 

(235,109)

 

(1)    Refers to the change in the income tax rate in accordance with Law No. 27,430 enacted on December 29, 2017.

 

Note 22 |     Tax liabilities

 

   

03.31.18

 

12.31.17

Current

       

Provincial, municipal and federal contributions and taxes

 

493,271

 

398,032

VAT payable

 

880,064

 

493,151

Tax withholdings

 

80,805

 

88,781

SUSS withholdings

3,134

 

3,515

Municipal taxes

 

72,513

 

68,457

Tax regularization plan

 

1,234

 

1,519

Total Current

 

  1,531,021

 

  1,053,455

22


 

 

 

CONDENSED INTERIM

FINANCIAL STATEMENTS

NOTES

Note 23 |     Provisions

 

   

 Non-current

liabilities

 

 Current

liabilities

   

 Contingencies

 At 12.31.17

 

598,087

 

129,258

         

Increases

 

103,227

 

28,079

Decreases

 

(8)

 

(10,715)

 At 03.31.18

 

701,306

 

146,622

         

 At 12.31.16

 

341,357

 

87,912

Increases

 

36,472

 

29,798

Decreases

 

(4)

 

(12,943)

 At 03.31.17

 

377,825

 

104,767

 

Note 24 |     Revenue from sales

 

   

 03.31.18

 

 03.31.17

Sales of electricity (1)

 

10,963,575

 

  5,332,301

Right of use on poles

 

35,385

 

28,135

Connection charges

 

8,559

 

5,725

Reconnection charges

 

3,839

 

474

Total Revenue from sales

 

11,011,358

 

  5,366,635

 

(1)    As of March 31, 2018, the amount accrued for the monthly installment to be applied in accordance with the provisions of ENRE Resolution No. 33/18 amounts to $ 302.3 million.

 

 

23


 
 

CONDENSED INTERIM

FINANCIAL STATEMENTS

NOTES

Note 25 |     Expenses by nature

 

The detail of expenses by nature is as follows:

 

Description

 

 Transmission and distribution expenses

 

 Selling expenses

 

 Administrative expenses

 

 Total

Salaries and social security taxes

 

  748,260

 

  136,301

 

151,054

 

1,035,615

Pension plans

 

  27,146

 

  4,945

 

5,480

 

  37,571

Communications expenses

 

  8,183

 

  49,023

 

3,897

 

  61,103

Allowance for the impairment of trade and other receivables

 

-

 

  179,451

 

  -

 

  179,451

Supplies consumption

 

  95,366

 

-

 

13,925

 

  109,291

Leases and insurance 

 

  108

 

-

 

33,617

 

  33,725

Security service

 

  11,500

 

  47

 

33,179

 

  44,726

Fees and remuneration for services

 

  253,816

 

  184,910

 

145,840

 

  584,566

Public relations and marketing

 

-

 

-

 

2,207

 

  2,207

Advertising and sponsorship

 

-

 

-

 

1,137

 

  1,137

Reimbursements to personnel

 

  16

 

  9

 

73

 

  98

Depreciation of property, plants and equipments

  102,224

 

  14,584

 

11,511

 

  128,319

Directors and Supervisory Committee members’ fees

-

 

-

 

4,260

 

  4,260

ENRE penalties

 

  312,408

 

  62,790

 

  -

 

  375,198

Taxes and charges

 

-

 

  86,034

 

3,989

 

  90,023

Other

 

  94

 

  53

 

1,303

 

  1,450

At 03.31.18

 

1,559,121

 

  718,147

 

411,472

 

2,688,740

 

The expenses included in the chart above are net of the Company’s own expenses capitalized in Property, plant and equipment as of March 31, 2018 for $ 171.1 million.

 

Description

 

 Transmission and distribution expenses

 

 Selling expenses

 

 Administrative expenses

 

 Total

Salaries and social security taxes

 

  768,857

 

  131,174

 

141,479